Rupee hits new low against dollar

Indian rupee hit an all-time low against the dollar for the fifth successive trading day on Tuesday amid concern about slowing domestic growth and continuing global uncertainty. The Indian unit fell to 55.20, below its previous record low of 55.05 a day earlier, as demand for the US currency grew. The partially-convertible rupee opened Tuesday slightly higher on improved global risk appetite, but steady dollar buying pushed the Indian currency down. While Europe’s debt crisis is a major concern, the rupee has also been affected by several domestic problems including India’s widening trade and current account deficits and declining foreign fund inflows. There has also been pressure from oil importers, who exchange rupees for dollars when they buy crude for energy-scarce India, which imports four-fifths of its crude oil needs. Many analysts and traders predict the rupee may fall further in the coming days with risk-aversion hitting global markets and sentiment souring over India due to its gaping deficits and poor economic data. The Indian economy is predicted to have grown 6.9 percent in the last fiscal year to March — the slowest pace since the 2008 global financial crisis. On Tuesday, there was no immediate sign of fresh central bank intervention as the rupee weakened further, but the bank is believed to have stepped in to prop up the currency more than a dozen times this year. The rupee was Asia’s worst performing currency in 2011, losing more than 20 percent of its value against the dollar compared to the previous year.